Gas Prices On The Rise – What Else Is New?

I was driving by the gas station today and looked at the cheapest gas on the sign. It was $3.29 a gallon. What I find interesting is the last time gas was $3.29 a gallon, the whole nation was screaming bloody murder. Now, rather than scream, everyone seems to be just sucking it up and paying the price. It’s interesting how we slowly aclimate to the higher price. I’m sure there is a term for this type of behavioral response but I have no idea what it is.

I’ll be interested to see what kind of profits the oil companies roll around in this quarter. It seems somewhat amazing to me that we can take a limited resource like oil and have no regulation at all on it. I’m not going to say whether I think that is right or wrong, but I wonder what would happen if energy was regulated? Would we see the massive spikes in price? Would we pay more for energy because of the lack of competition? Frankly, competition doesn’t seem to be helping all that much at this point, although I’m just an amateur shmuck sitting in line at the gas station, so what do I know. Would regulation really do anything, considering we are now a global economy? What good would regulation do in one country? Probably not a lot. Maybe the better approach would be to enact legislation to force better energy efficiency. What do you think?

What I do know is that all of this expensive energy, (natural gas for my house, fuel for my car, electricity for my house) is causing me to really think about my consumption. I find myself much more conscious of my energy usage and plan to be much more responsible with the cars that I buy in the future. I think that Honda and Toyota have seen the writing on the wall for a long time. They have aggressively pursued high fuel efficiency and they are reaping the rewards of that now. With all the energy consumption in nations like China and India, it only stands to reason that we would start seeing much more demand. I wish that we as a nation had done a better job of predicting the increased global consumption sooner, but I certainly can’t blame anyone because I sure didn’t. (Not that a lowly Information Technology worker should be trying to predict global energy consumption anyway).

Anyway, just a rambling post about energy in general. I really wonder what the right answer is when it comes to our nation’s use of energy. We certainly can’t enforce global rules for energy consumption and frankly we wouldn’t have much credibility if we tried considering how we all consume more than pretty much every other country out there.

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Comments

Energy production is heavily regulated. That’s part of the reason we’re paying as much as we are. Of course it’s also heavily subsidized, which is part of the reason we’re paying as little as we are.

Personally, I’m all for high gas prices. I’d like to see gas prices double, triple, even quadruple. Judging by the magnitude of single occupant vehicles on the road, and the scarcity of multiple occupancy vehicles, clearly we are nowhere near the point where the price fuel is pinching people’s pocketbooks.

Also chiming in to say that regulation already is the problem. Gas prices go up in the summer, not only because people tend to drive more and take more road trips than in winter, but also because the EPA requires that gas stations and refineries use a “summer blend” which costs more to make than the “winter blend.”
Add in the fact that there aren’t enough oil refineries in the US=expensive gas.
Add in the fact that the governments of China and India, countries which are rapidly increasing their car usage, subsidize the price of gas there (thus increasing the demand for it and consumption of it) and you’ll understand why we’re paying so much more for it.
Gasoline taxes don’t help the situation out much, either.